"We want Israel in the driver's seat in dealing with China"

AuthorRoy Barak
Published date12 June 2022
Publication titleGlobes (Rishon LeZion, Israel)
In just 40 years, China, once a poor agricultural economy, has become an engine of global capitalism. About a century after the US economy surpassed that of Britain, China's meteoric growth - probably unprecedented in history - began through a series of reforms that shifted the Soviet-style planned economy toward a capitalist market economy

From an economic point of view, this has been a huge success. China's gross domestic product (GDP) skyrocketed from just $150 billion in 1978 to $ 1 trillion in 1997 and $16.3 trillion in 2021. China is the only economy to have maintained an average annual growth rate of 9.5% from 1979 to 2018. Recent estimates suggest that, by 2030, China will overtake the US, and will have GDP of $33.7 trillion versus $30.4 trillion for the US.

According to a report published in March by the Belfer Center for Science and International Affairs at Harvard University's Kennedy School of Government, "China's sustained 'miracle economic growth' over the past four decades at an average rate four times that of the U.S. has redefined the global economic order."

The Belfer Center states that although, on its current trajectory, China is slated overtake the US within a decade, "By the yardstick both the CIA and the IMF judge to be the best metric for comparing national economies - purchasing power parity - China has already surpassed the US to become the world's largest economy."

The report gives other significant measures that indicate how China has strengthened at the expense of the US. Among other things, "China has displaced the U.S. to become the manufacturing workshop of the world; China has overtaken the U.S. to become the No. 1 trading partner of most nations in the world; China has established itself as the most essential link in the world's critical global supply chains; and China has replaced the US as the primary engine of global economic growth. Since the 2008 financial crisis, one-third of all growth in the world's GDP has occurred in just one country: China."

In addition, the Belfer Center researchers note, "In 2020, China supplanted the U.S. as the home to the largest number of the most valuable global companies on Fortune's Global 500 for the first time."

A threat to the democratic model

The implications of the way China is strengthening at the expense of the US are many, and go beyond the economic aspect. In 2022, China's defense spending is expected to rise by 7.1 % to $230 billion, the second highest military budget in the world, although still far behind that of the US, which currently spends three times that amount, about $690 billion, on defense and security. But the assessment is that, as the Chinese economy grows, so will China's desire to outdistance the US in the arms race. In such a state of affairs, a military conflict seems only a matter of time.

It is not only the military and the economic aspects that are disturbing. Although China is not a dictatorship in the classic definition of the word, the unprecedented economic success of the authoritarian one-party state model, headed by President and General Secretary of the Chinese Communist Party Xi Jinping, poses a threat to the democratic model itself.

With a capitalist agenda backed by communist-style centralism and authoritarian leadership, China has managed to teach the free world a lesson. Even if the forecasts for 2030 prove imprecise, the trend is clear. Eventually, the dragon will beat the Statue of Liberty. The implications of China's growing strength are myriad, and the global future is uncertain: Will the success of the Chinese authoritarian model undermine democracy from within? Will labor rights in Western countries have to take a step backwards in order to deal with China's cheap labor? These are among the questions posed by China's predicted hegemony.

The US is taking these dangers extremely seriously, repeatedly warning its allies and partners against China's growing power and interests, and sometimes applying heavy pressure. The basic US argument is that Beijing's interests are not necessarily just economic, or just military, or just political. Often, they are a combination of all these, even though the matter in hand is apparently just an economic deal, such as constructing a road system in Africa, laying a railway in Europe, or constructing and operating a port in Haifa.

In recent years, the US has exerted direct pressure on Israel to stop certain deals with China. It made Israel cancel...

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